Third-party data audiences are often a waste of money

Our latest findings on our third-party audience validations are now available online on SSRN. This research has been peer-reviewed and will appear in the Frontiers section of Marketing Science. Given recent privacy trends, it appears more important than ever to understand the benefits of third-party data. Unfortunately, our estimates show that the high costs of using third-party audiences often outweigh any efficiency gains in identifying the desired target market based on audience segments. The cost-benefit ratio/ ROI depends on many factors and can still create positive use cases, in particular for expensive media placements, such as video or premium inventory. We encourage advertisers to conduct their own validation tests and cost estimates.

Our findings also highlight the relevance of the data-labeling initiative of the IAB . Given the huge variation in data quality across data brokers, advertisers need to know where the audiences are coming from to better assess their usefulness going forward.